DHL plans more investments in India's industrial cities

Global logistics company DHL is planning its next investment in India's major industrial cities as part of its ongoing euro 100 million expansion strategy for the country announced last October, a senior company executive said here today.

"We expect to conclude a strategic review (of the investment) in the second half of this year and conclude the investment that would need to be made," said Paul Harry Graham, the Singapore-based Chief Executive Officer for Asia Pacific, Middle East & Africa at DHL Supply Chain.

"It would probably be a dozen more cities and a sizeable investment," Graham told PTI.

Jet-Etihad deal may close tomorrow

The cities would include Pune, known for automobile industries, Ludhiana and Nagpur as well as further expansions at DHL's existing operations in Delhi, Kolkata and Ahmedabad, he said, adding the euro 100 million investments would cover eight key cities.

"We are very confident about the long-term future in India, particularly when it comes to DHL business and the supply chain services," said Graham.

Elaborating on DHL plans for India, Graham said the company's new unit, DiSCha Consulting, is already advising customers on managing supply chain in the Indian market. "We will educate our manpower in managing DHL operations, provide incentives to our employees," he said, pointing to the
ever increasing demand for supply chain services from the Indian industrial sectors.

"Pharmaceutical industry is a specific target for us, globally and specifically in India," he said.

SpiceJet looks good for next two-three months: Irani

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See recovery in power sector order from H2FY14: Rel Infra

K Ravi Kumar, Independent Director of Reliance Infra told CNBC-TV18 regulatory bodies like the Central Electricity Regulatory Commission (CERC) should be free to fix tariffs. He also advocated the need to place mechanisms that will ensure reduction of Aggregate Technical and Commercial (AT&C) losses.

Kumar emphasised on the need to ensure free flow of power across grids. He believes distribution lines should be strengthened to lower transmission and distribution loss. Besides, he is also in favour of a single national grid for transmitting power across regions.

Moreover, Kumar stressed on the requirement for single window clearance model adopted for ultra modern power projects. Going forward, he sees recovery in power sector orders in the second half of fiscal year 2014 onwards and expects some margin pressures continuing for BHEL .

Here is the edited transcript of the interview on CNBC-TV18.

Q: Part of the power sector problems are with the Central Electricity Regulatory Commission (CERC) that is a regulatory body, part of them are perhaps impacted by environmental related issues and some of which could even be in the courts. So what exactly can the CCI resolve? If you have to order their agenda for the power sector, what will be the first two problems that you will put on their plate?

A: One thing is that the regulatory bodies must be free from political interference. That is not only CERC, the State Electricity Regulatory Commissions (SERCs) are also there. The SERC is independent of what is going on in the centre.

So as far as CERC and SERCs are concerned, they must be totally free to fix the tariffs depending on what is necessary and what is actually the rate of return for various developers, whether it is the state generating stations or central generating stations like National Thermal Power Corporation (NTPC) or it is private developers independent power producer (IPP) and all that.

If the electricity sector has to grow, they must be compensated by real tariff which is not too bad for consumers and at the same time, it is fair to both consumer as well as the generating companies. That is one thing which is necessary. Second thing is there is a lot of shortage in south and the rates are quite high. The merchant rates in the south are very high.

Whereas if you see in the western, eastern or in the northern region, it is around Rs 3.5 which will not compensate the IPPs to put up new plants or will not allow new IPPs to come up for the existing developers. So there is a need for rationalization and there must be enough corridors for transmitting power from north to south. The SERCs and CERCs must be independent, the regulators must be independent and there must be a regular tariff revision. Last year, there was good tariff revision and this financial year was one of the best years. There was a rise in tariffs almost everywhere.
 
Second is Aggregate Technical and Commercial (AT&C) losses. Competition is also very difficult and AT&C losses should be brought down to at least 12 percent in the country. It is quite high today, around 30 percent and in some places it is around 55 percent.

Q: Isn't that because there is wholesale pilferage at the state level and if it is not pilferage, then it is actually blessed by state level politicians? Can a cabinet committee of ministers really do much about these kinds of transmission and distribution (T&D) losses? May be some high-tension wires were recommended long back by Suresh Prabhu's ministry and that requires a whole lot of investment. What can they do about T&D losses?

A: Actually there must be separate feeders for agriculture and also other feeders and a meeting should be done electronically. In foreign countries, if you look at US or Europe, the pilferage is almost nil. Of course attitude of the people have to change but, definitely there must be some mechanism. One is tariff hike and recently the power ministry has told tariff hike is the last solution.

So definitely, there is necessity to reduce AT&C losses and also ensure tariff hikes. This is one thing that is necessary and there must be free flow of electricity from all grids and there must be a national grid so that a developer in the north should be able to pump electricity to the south.

More to come.

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China's steel industry facing 'great difficulty': CISA

Faced with falling demand and rising costs, China's famed steel industry was confronted with "greatest difficulties" in decades due to global economic crisis, China Iron and Steel Association (CISA) said.

CISA said its member companies saw profits plummet 98.22 percent to 1.58 billion yuan (about USD 252 million) year on year, it said in a release here today.

China's crude steel output grew 3.1 percent to 716.54 million tonnes in 2012, down 5.8 percentage points from a year earlier, it said.

The steel industry faced an extremely difficult situation in 2012, as an economic slowdown in China and the rest of the world curtailed market demand and resulted in flagging steel prices, the association said.

Cut duty on iron ore to zero: Tata Steel

China's GDP grew 7.8 percent year on year to reach 51.93 trillion yuan (about USD 8.51 trillion) last year, the slowest growth rate since 1999, according to National Bureau of Statistics.

Slowing economic growth has led to decline in steel demand from downstream industries, such as the railway construction, property development and shipbuilding sectors, the association said.

The excessive production capacity in China has caused steel output to greatly exceed market demand.

As a result, steel producers competed fiercely to boost their sales, which in turn resulted in steel price decreases, state run Xinhua news agency quoted the association as saying. "The steel industry experienced its greatest difficulties since the beginning of the century," the association said.

Reports from different parts of the country said a number of steel mills including some major ones have been closed down during the past few months relocating their work force.

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Cabinet clears revival package for Scooters India

The Cabinet today approved the Rs 200-crore revival package for ailing public sector unit (PSU) Scooters India (SIL)."The Cabinet today cleared the proposal to revive Scooters India," sources said.

After the government shelved plan to sell out its entire stake in SIL, the Department of Heavy Industry had proposed a revival package of more than Rs 200 crore for revival of the company, they said.

Besides, the department had consulted the Board for Reconstruction of Public Sector Enterprises (BRPSE) which examined the case and later suggested a revival package for the sick unit.

In 2011, the Cabinet had given approval to divesting government's entire 95.38 per cent stake in Scooters India to a private player through strategic route.

But the Department of Heavy Industry had put on hold the strategic sale of ailing public-sector unit SIL.

The automobile company, which has about 1,200 regular employees, has been incurring losses since 2002-03. In March2009, the company was declared sick.

Incorporated in 1972, SIL initially manufactured scooters under the brand name Vijai Super for the domestic market and Lambretta for overseas markets.

Later, it ventured into the three-wheeler segment with the Vikram brand. In 1997, it stopped two-wheeler production and is now engaged in the manufacture and marketing of only three-wheelers.

SIL's net loss (before tax) stood at about Rs 20 crore during the 2011-12 fiscal.

Shares of Scooters India Ltd today traded at Rs 36.55, up 4.88 per cent in the afternoon session on the BSE compared to the previous day.

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Growth risks prompt RBI to cut repo, CRR by 25bps

Moneycontrol Bureau

The Reserve Bank of India (RBI) on Tuesday slashed its key policy (repo) rate by 25 bps to 7.75%  in its third quarter monetary policy. Repo is the rate at which banks borrow funds from the central bank. Consequently, the reverse repo rate too decreased to 6.75%. The measures were on expected lines.

At the same time, RBI cut the cash reserve ratio (CRR) or the portion of deposits banks keep with RBI, by 25 bps to 4.00%. This reduction will inject Rs 18,000 crore additional liquidity into the system.

"There is an increasing likelihood of inflation remaining rangebound around current levels going into 2013-14," Dr D Subbarao, governor, RBI said in the policy document.

"This provides space, albeit limited, for monetary policy to give greater emphasis to growth risks. The above policy guidance will, however, be conditioned by the evolving growth inflation dynamic and the management of risks from twin deficits."

"The decrease in the policy rate came after a gap of nine months. Last, RBI had "frontloaded" (read cut) the repo in April, 2012 by 50 bps. So far in 2012-13; the banking regulator trimmed CRR by 50 bps collectively.  Through this latest policy action, RBI continued to strike a balance betweeen higher rate of inflation and growth moderation risks. It revised its growth forecast to 5.5% in 2012-13 as against 5.7% estimated earlier.

However, RBI sees some telltale signs of easing rate of inflation on account of non-food manufactured products. Although, the persisting food inflation may keep the rate range-bound.

"Keeping in view the expected moderation in non-food manufactured products inflation, domestic supply-demand balances and global trends in commodity prices, the baseline WPI inflation projection for March 2013 is revised downwards from 7.5% set out in the second quarter review to 6.8%," the governor said.

On system liquidity front, RBI so far resorted to two-pronged mechanism: CRR reduction and repeated open market operations through which it buys back government securities to pump in liquidity. RBI conducted five OMOs in between December 2012 and January 2013, which helped inject Rs 47,000 crore liquidity into the banking system.

"Despite these measures, the average net LAF borrowings at Rs 91,000 crore in January (up to January 27), were above the Reserve Bank's comfort level," he said.

RBI is comfortable with any liquidity level up to 1% of net demand and time liabilities (total deposits in the system) at Rs 65.39 lakh crore. Credit growth projection is retained at 16% in FY13.

According to the governor, the policy action is aimed at providing an appropriate interest rate environment to support growth as inflation risks moderate. Besides, containing the inflation coupled with a prudent liquidity management to ensure adequate credit flows are the two other parameters.  

RBI's policy rate changes at a glance

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DLF plans 5-6m sq ft new launches ahead, says CFO

Ashok Tyagi, CFO of DLF said they have seen good response to the new launch, Sky Court in new Gurgaon. In the next few months, the realty player is looking to launch 5 to 6 million square feet of projects in the golf course region. He also informed that the company is in talks with potential buyers and are just a few weeks away from the closure of its wind farm sale agreement.

Also read: Goldman upgrades DLF to 'buy' on upcoming projects

Tyagi also told CNBC-TV18 that their Bangalore launch has done pretty well in FY13. However, Indore seems to be a slow market at the moment, he opined. Besides, the company's net debt will be in the range of Rs 18,500 to Rs 19,000 crore by the end of FY13, he added. Tyagi also emphasised on the need to issue 4.8 percent fresh equity to bring down promoter stake and added that DLF will be launching an IPP by June to meet SEBI guidelines.

Here is the edited transcript of the interview on CNBC-TV18.

Q: Can you start off by walking us through what kind of launches you have penciled in for this calendar year itself and what kind of pre-sales responses you are getting already for the Delhi NCR region first?

A: In the Delhi NCR region we have already launched projects in the new Gurgaon region, that is the newer sectors. We had an excellent response to our product called Skycourt in December. We have products lined up for launch in Phase 5 Golf Course Road and in the new Gurgaon region through the next few months and hopefully, you should see most of them coming up for launch across the next few months.

Q: Can you give us some ballpark idea of what kind of square footage you are talking about in terms of new offers from the Gurgaon and NCR region and what kind of average rates you may actually be able to achieve in that region now?

A: We have done about a million square feet in December. So we are targeting another couple of million square feet launches in the new Gurgaon region and between five-six million square feet launch over the next few months in Phase 5 Golf Course Road region.

I can't time it exactly, whether it will be February or March or April but this is the plan across the near term. We will continue to do launches in the new Gurgaon region through the year as we continue to get approvals and there is demand for our projects. So far, the demand has been exceptionally good for whatever we have launched and the price points that we have been able to achieve have been very good.

Q: Your investors would have been quite encouraged by the end or rapping up of the Aman Resorts and the Mumbai plot sale but, the next step in your deleveraging process are the wind power business or any other properties that you have for sale. Can you give us a timeline and what you intend to achieve in 2013 on that front?

A: Mumbai is done. The agreement for Aman Resorts is signed and we expect the funding to happen in this quarter. As far as the wind farm is concerned, we are few weeks away from the complete closure of the agreement and we could potentially get the funding this quarter or may be it could flow in the next quarter.

Our expectation is that at the end of these three major divestments, which is Mumbai, Aman and the wind farm, our net debt should be in the range of Rs 18500 to 19000 crore versus Rs 23000 crore in September. Hereon, the next major event as and when it happens will be the capital action that we will need to do as per the SEBI guidelines. That should get the net debt to a stable number for the medium term and from then on the operating cash flows take over because we don't have any big ticket non-chores lined up beyond that.

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India, Dubai passenger traffic rises in 2012

With Mumbai and Delhi featuring amongst the busiest routes from UAE, India remained Dubai Internationale's single biggest country destination in terms of passenger numbers last year.

The passenger traffic between Dubai and India continued to show robust growth during the past year, with total passenger traffic rising 7.4 percent year on year to 7.34 million passengers in 2012, the annual traffic report issued by Dubai Airports has said.

Traffic was bolstered by the introduction of Spicejet which added new flights from Delhi, Mumbai, Kochi and Ahmedabad to Dubai.

Domestic air traffic demand fell by over 6% in Nov: IATA

Air India Express, Indigo and Emirates also added new flights and destinations during the year, it said in a statement released here on Sunday.

Following its busiest month and year on record, Dubai International has taken over as the world's third ranked airport for international passenger numbers, vaulting ahead of Hong Kong International Airport in the global rankings, Dubai Airports said.

Passenger traffic surged 13.2 percent to 57,684,550 in 2012, up from 50,977,960 passengers recorded during 2011. The 2012 passenger traffic also exceeded Dubai Airport's forecast at the start of the year of 56.5-million by more than 1 million passengers.

The year-end numbers were bolstered by a record 5,320,961 passengers in December 2012, 13.4 percent higher than the 4,690,726 passengers recorded in December 2011 and the second month in Dubai International's 52 year history that passenger traffic has exceeded 5 million passengers.

Aircraft movements for 2012 reached 344,245 movements, up 5.5 percent from the 326,318 movements recorded in 2011.

Regionally, South America was the fastest expanding market in terms of percentage growth in 2012 (+99.4 percent) due to the introduction of Emirates flights to Buenos Aires and Rio de Janeiro. The Russia & CIS region followed in second place (+36.9 percent), Australasia (+21.9 percent) in third spot and GCC fourth (+19.4 percent).

New Emirates flights to Washington, Dallas Fort Worth and Seattle during the year saw North American passenger traffic grow 18.6 percent, making it the fifth fastest growing region. Freight volumes rebounded towards the end of last year, helping total volumes for 2012 rise 3.9 percent to 2,279,624 tonnes from 2,194,264 tonnes recorded in 2011. In December, cargo volumes climbed 6.5 per cent from 189,593 tonnes in December 2011 to 201,949 tonnes in December 2012. 

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Govt extends date of coal mines allocation to PSUs

The government today said it has extended the last date for receipt of applications for allotting 17 coal mines to public sector firms.

"The Ministry of Coal has extended last date of receipt of applications for allocation of 17 coal blocks to the Government companies/undertakings from January 30, 2013 to February 8, 2013," an official statement said.
    
Initiating the process of allocation of mines, the Coal Ministry had in December 31 invited proposals from PSUs for allotment of mines to them, mostly for captive power plants.

Coal India to raise output by 6% in 2013-14: S Narsing Rao
    
The development came in the wake of the government's repeated announcements to make policy for mines allotment transparent, following CAG terming potential losses of Rs 1.86 lakh crore to the exchequer on account of blocks allotment to 57 private firms without auction.
    
The Coal Ministry initiated the process of allocation of mines under the amended provisions of MMDR (Mines and Mineral Development and Regulation) Act and rules framed thereunder, the statement said.
    
In the first round, the Government proposes to allocate coal blocks to the government companies Central and State for specific end use (power) and coal mining, it added.
    
The blocks on offer are: Jilga-Barpali, Baisi, Banai, Bhalmunda, Kente and Kerwa in Chhattisgarh, Gowa, Pachwara South and Kalyanpur-Badalpara in Jharkhand, Mahajanwadi in Maharashtra, Kundanali-Laburi, Sarapal-Nuapara, Tentuloi, Chandrabila and Brahamani in Odisha, Gandbahera-Uhhenia block in Madhya Pradesh and Deocha-Pachami-Dewanganj-Harinsingha in West Bengal.
    
These blocks on offer have estimated reserves of 8.45 billion tonnes.

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Suzlon Energy bags order for supplying 22 MW of turbines

Wind power major Suzlon Energy today said it has received an order for supplying turbines for setting up a 22 MW project in Tamil Nadu.

"Suzlon Group has signed a contract for a 21.75  MW project with Sri Kumarswamy Mineral Exports Private Limited. The project comprises nine units of 1.25 MW and five units of 2.1 MW wind turbines," Suzlon Energy said in a statement. The project is set to be commissioned in the Dindigul and Tirunelveli district of Tamil Nadu by the end of March 2013.

Suzlon up 5% on lenders approval for CDR

Sri Kumarswamy Mineral Exports Private Limited has an existing installed capacity of 29.25 MW from wind energy projects solely developed by Suzlon, operating in sites across  Karnataka, Tamil Nadu and Maharashtra.

"We intend to capitalise on its multiple  revenue offerings and value creation opportunities through this project. We see Suzlon as the right, long-term partner in our expanding wind energy business," Shantesh Gureddi, Managing Director, Sri Kumarswamy Mineral Exports Private Limited said.

"We are delighted to be working again with Sri Kumarswamy Mineral Exports Private Limited. This repeat order demonstrates the confidence our customers have in our products and service capabilities," Rohit Modi, CEO  - India and emerging markets, Suzlon Energy Limited  said.

Shares of Suzlon Energy were trading at Rs 21.50, up 1.90 per cent on BSE.

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Etihad delegation to meet Anand Sharma soon

Mon, Jan 28, 2013 at 14:00

A delegation from Abu Dhabi's Etihad Airways will meet Commerce Minister Anand Sharma in the next "couple of days," a government statement quoting the minister said, amid speculation that the Gulf carrier is close to buying a minority stake in Jet Airways.

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Etihad delegation to meet Anand Sharma soon

A delegation from Abu Dhabi's Etihad Airways will meet Commerce Minister Anand Sharma in the next "couple of days," a government statement quoting the minister said, amid speculation that the Gulf carrier is close to buying a minority stake in Jet Airways.

Like this story, share it with millions of investors on M3

Etihad delegation to meet Anand Sharma soon

A delegation from Abu Dhabi's Etihad Airways will meet Commerce Minister Anand Sharma in the next "couple of days," a government statement quoting the minister said, amid speculation that the Gulf carrier is close to buying a minority stake in Jet Airways.

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A delegation from Abu Dhabi's Etihad Airways will meet Commerce Minister Anand Sharma in the next "couple of days," a government statement quoting the minister said, amid speculation that the Gulf carrier is close to buying a minority stake in Jet Airways .

Etihad is in talks to pick up a 24 percent stake in Jet, India's No 2 carrier, for up to USD 330 million, a government source said earlier this month.

SpiceJet is not desperate to sell stakes immediately: CEO

The government statement did not give any detail on the scheduled meeting with Etihad.

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The latest earning numbers FIRST on CNBC-TV18

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LG Electronics India eyes 20% revenue growth in 2013

Consumer durables major LG Electronics India today said it expects revenues to grow by 20 per cent in 2013, riding on robust performance by its home appliances division.

The company, which is looking to close 2012 with a low single-digit rise in its turnover, will also invest around Rs 1,500 crore in this year on various segments.

"In this year, we are expecting to grow our overall business by 20 per cent. Our growth driver will be our strong portfolio of home appliances," LG Electronics India Managing Director Soon Kwon told PTI here.

Samsung expects global PC market to shrink 5% in 2013

He said contributions from refrigerators are expected to increase to Rs 5,300 crore in this year compared to Rs 4,570 crore in 2012.

"We are the market leader in home appliances division and we have a very robust product portfolio. We will continue to be a strong performer in this segment," Kwon said.

The company is, however, expecting an over 30 per cent fall in CRT television segment, he added.

Asked about revenue for last year, Kwon said: "We will announce the detailed results in next one week. It will be a very very minimal growth in low single digit."

Talking about investment plans, he said the company will put in around Rs 1,500 crore in this year on engineering, R&D, developing new products, refreshing equipments, advertising and other promotional activities.

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Mcleod Russel rises 3% on Nomura buy report

Mcleod Russel , the world's biggest tea grower, rose as much as 2.8 percent intraday on Monday as the research firm Nomura has recommended a buy rating on the stock with a target price of Rs 429.

"While in the short-term the stock may react negatively to weak third quarter numbers, one could use it as an opportunity to accumulate the stock as the outlook for tea prices in FY14 remains positive," Nomura explained.

Mcleod reported a very tepid set of numbers in the third quarter of financial year 2012-13. EBITDA and operational margins were a disappointment.

Profit after tax rose by 5 percent year-on-year to Rs 123 crore in October-December quarter while net sales grew by 11 percent to Rs 448 crore from Rs 405 crore during the same period.

Earnings before interest, tax, depreciation and amortisation (EBITDA) went up by 2 percent YoY to Rs 136 crore in the thid quarter. However, EBITDA margin fell by 265 basis points YoY to 30.4 percent.

At 12:34 hours IST, shares rose 1.24 percent to Rs 346 on Bombay Stock Exchange.

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Crisil downgrades Bharti Airtel credit ratings

Rating agency Crisil has downgraded telecom major Bharti Airtel's rating after the government imposed a one-time fee for spectrum it holds beyond a threshold. "CRISIL has downgraded its ratings on Bharti Airtel long-term debt programmes and bank facilities to 'CRISIL AA+/Stable' from 'CRISIL AAA/Negative'. The rating on the company's shortterm debt and bank facilities has been reaffirmed at 'CRISIL A1+'," the agency said its ratingstatement on Thursday.

The agency is of the view that Bharti Airtel's gearing will not improve significantly as on March 31, 2013, despite an equity infusion through an initial public offer (IPO) in its subsidiary, Bharti Infratel. "Furthermore, potential cash outflows towards one-time spectrum fees and licence renewal fees are likely to result in its capital structure taking longer to improve than CRISIL's previous expectations," CRISIL said.

The government has imposed Rs 5,201 crore one-time spectrum fee on Bharti Airtel for spectrum that the company was allocated apart from the airwaves that it received bundled with licence. The agency,however, said that Airtel's operating performance in India is expected to improve on the back of its strong market position, healthy operating efficiencies, and expectation of reduced competition.

The agency said that despite intense competition, Bharti Airtel's Indian operations witnessed a moderate growth of 7.6 per cent in its subscriber base to 185.9 million as on September 30, 2012, from 173 million as on September 30, 2011. "The company reported a strong operating margin of around 32.2 per cent in the first half of 2012-13.

Its average realised revenue per minute has remained stable at about Re
0.44," CRISIL said. The agency said that debt levels on the company remained higher than CRISIL expectations at Rs 70,500 crore as on September 30, 2012, as against Rs 69,000 crore as on March 31, 2012. For Bharti Airtel's Africa business, CRISIL said it expects the bsuiness to gradually improve its operating efficiency driven by steady improvement in the utilisation of network

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Ceat forms JV with Bangladesh co; to invest USD 67 million

RPG Group's tyre-making arm Ceat today announced formation of a joint venture company with the Bangladesh-based AK Khan & Company to set up a manufacturing facility in the neighbouring country.

The facility, which will come up at the investment of USD 67 million, is expected to be functional by December 2014, Ceat said in a statement. The 110-tonne per day facility will roll out tyres for trucks, LCVs and 2/3 wheelers for the Bangladeshi market.

Also Read: Apollo Tyres opens global R&D centre at Netherlands

The joint venture, in which Ceat will hold 70 percent stake, is a part of the long-term strategy for both the partners to have a presence in the growing tyre market in Bangladesh, the release said.

"This strategic partnership will enable us establish a leadership presence in the large tyre market of Bangladesh," Ceat Managing Director Anant Goenka said. Under the agreement, Ceat will provide technical and business expertise and manage the JV operations, while AK Khan will bring in knowledge of Bangladesh market besides providing the strength of "goodwill and local presence".

"The plant will earn valuable foreign exchange for the country by exporting approximately 20 percent of its output to the region and rest of the world," AK Khan Managing Director Salahuddin Kasem Khan said.

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Expect Etihad to increase stake, delist Jet Airways: CAPA

Kapil Kaul, CEO-South Asia, Centre for Asia Pacific Aviation (CAPA) estimates, on CNBC-TV18, that Etihad may increase its stake to 49 percent in Jet Airways and delist the airline to avoid following the mandated procedures involved in a company listed on the stock exchange.

Also Read: Etihad may value Jet Airways stake at $1.25bn; stock up 3%

SpiceJet is not desperate to sell stakes immediately: CEO

Below is the edited transcript of  Kapil Kaul's analysis  on CNBC-TV18

Q: Do you believe the Etihad deal will strategically benefit Jet Airways and could be the first deal in India where we see a foreign carrier boards an Indian carrier?

A: The deal looks certain. We expect a formal announcement to be made in the next week or 10 days. Most of the issues have been sorted out. There are some formalities which need to be concluded. So, this could be the first deal of this kind.

Incidentally, Jet Airways was the beneficiary of the foreign direct investment (FDI) in '90s is again the first beneficiary of FDI. It is quite a strategic deal and one must not see it only from the perspective of Jet-Etihad. It will structurally bring in a lot of changes across the entire sector.

One has to wait and watch what will be the final contours of the deal will be. I would really want to see that within the near-term Etihad increases its stake to 49 percent. I see Jet Airways being delisted when Etihad reaches 49 percent. But the contours of the deal and the structure that's been agreed make it a very important deal not only for Jet Airways, but for the entire sector.

Q: What makes you say that this will ultimately culminate to the point where Jet Airways will actually be de-listed from the Indian stock markets?

A: I don't expect Etihad to continue holding a 49-percent stake in a company that is listed. But one has to wait and watch. Etihad would not like to go through the kind of disclosures and other processes mandated for a listed company. So, I would think that the chances of de-listing exist.

Q: Strategically, how will Jet benefit from shifting its international hub from Brussels currently to Abu Dhabi to avail of  the lower ATF prices and a joint go-to market strategy as far as the internationalisation of routes is concerned?

A: I would be surprised if they shift their Brussels hub. I don't expect that to happen in the first phase. That will actually mean that the entire network strategy would have to completely change and I don't see that happening at all in the first phase, may be in the second phase.

You could expect them to move out of Brussels and look at some other European point which might add value to their US and onward European network, but we don't see them shifting to Abu Dhabi.

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Hero Moto yet to break deadlock with workers

Hero MotoCorp , world's largest two-wheeler maker continues to have labour trouble as wage negotiations between the management and the workers failed to break the deadlock. After the union members meeting on Tuesday, some of the workers of the Dharuhera plant also decided to 'go slow' on production starting from Wednesday.

The move delayed the company's production starting Thursday. The marathon talks between the management and the Gurgaon union to break the impasse over wage settlement doesn't seem to end. After the meeting on Friday, the two sides still seem to be locked in negotiations to reach a common ground on the final terms of the settlement.

Workers are demanding an adequate compensation as productivity has gone higher since 2009. The management meanwhile chose to remain tight-lipped on the meeting but maintained they were hopeful of a resolution soon.

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Biocon to launch new drug in July-Sept quarter

Biocon , India's top listed biotech firm, plans to launch psoriasis drug Alzumab in the country in the July-September quarter, a top company executive said on Friday.

The company expects sales of 1 billion rupees from the drug over four years, Kiran Mazumdar-Shaw, chairman, Biocon said in a conference call.

Short Biocon, says Sukhani

Late on Thursday, Biocon reported an 8.24 percent rise in net profit to Rs 92 crore for the Oct-Dec quarter compared with a year earlier.

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Liberty Phos deal to derisk firm portfolio: Coromandel Intl

Kapil Mehan, MD, Coromandel International, says that the fertilizer company is going through structural change and realistic prices of fertilizer has led to moderate demand. The company has recently acquired Liberty Phosphates which the company feels is a move to derisk their portfolio. The deal will be funded from internal accruals.   

Below is the edited transcript of his interview to CNBC-TV18.

Q: What is the rationale of buying a controlling stake in Liberty Phosphates and how will you fund this transaction?

A: The funding will be done through internal accruals. We have a good long-term debt to equity ratio. We always keep it below 0.75 percent but currently it is at about 0.37 percent to 1. The rational for acquiring single super phosphate (SSP) is that this is one fertilizer which can be made through indigenous raw materials also.

So, almost 50 percent of the production of Liberty is through rock phosphate which they source from Rajasthan mines. The entire sulfuric acid which is required is also sourced internally. So the currency impact is less because most of the other P205 fertilizers are imported. So there is a degree of stability and derisk in this particular segment.

It is a very versatile fertilizer specifically for some crops as well as affordability for farmers. A bag of SSP would sell for about Rs 350 against Rs 1250 a bag for di-ammonium phosphate (DAP). This product completes our entire range so that we are able to address almost every segment of the farmers and the crops, the requirement of phosphate fertilizers.

Q: When will this acquisition be EPS accretive and how will it add to the revenue and profit profile of Coromandel?

A: Liberty is a profit making and well performing companies in the segment. We believe that in first year itself it will be EPS accretive.

Q: You have reported fairly ordinary numbers by your standards with sharp erosion in margins. Do you see this kind of painful performance continuing for a few more quarters?

A: We have to see it in right perspective because one quarter performance for any agriculture business is not an indicator of what the fundamentals of the business are. The industry is going through a structural change where after a long time the prices to farmers are becoming realistic and coming to the levels of the global prices with subsidies being reduced under the nutrient based subsidies.

Five years ago we used to collect around 15 percent from the farmer and 85 percent from the government. Today, we collect only 33-34 percent from the government and balance percent from the farmers. So prices to farmers have gone up

The seasonal factors have not been very good so some demand erosion has taken place. And on the other hand urea a nitrogenous fertilizer, continues to be highly subsidized and that causes a bit of distortion and motivation for the farmers to apply more urea than phosphate fertilizers but this is a transitive phase. We are very bullish on agriculture and food industry and that this will continue to drive our long-term vision.

Q: You said you will fund this acquisition through internal accruals, what is the exact cash on books that the company has currently and how much market share do you think the combined entity will have post the acquisition?

A: In the SSP segment, we will have around 17-18 percent market share and that will make us market leader in this segment. We always have about Rs 600-700 crore of cash in our balance sheet.

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IVRCL rebounds sharply on fresh orders, shares gain 8%

Construction company IVRCL bounced back in morning trade, rising as much as 8 percent intraday on Friday after the company received orders worth Rs 378.36 crore.

However, shares fell more than 8 percent in early trade to touch a 52-week low of Rs 30.25 on further selling. On Thursday, the stock crashed 20 percent to close at Rs 33 on Bombay Stock Exchange.

At 12:36 hours IST, IVRCL was quoting at Rs 35.10, up 6.36% over previous closing value.

Trading volumes increased 136.6 percent to 46,26,426 equity shares as against five day average of 19,55,352 shares.

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IT sector to see better gwth, create more jobs in '13: Kris

Enthused by improving global economic scenario and a renewed wave of reforms back in India, IT giant Infosys says it is bullish over better growth prospects of IT sector in 2013 and expects greater job creation this year.

"I believe 2013 to be better than 2012 for IT sector as globally lots of uncertainties have been removed, US elections are over, Europe is not going to split and people believe that it is going to stay together," Infosys Co-founder and Executive Co-Chairman S Gopalakrishnan told PTI here.

Kris, as he is known, is here for the Annual Meeting of the World Economic Forum along with the top executives of a host of other Indian IT firms such as TCS, Wipro, HCL and Mahidra Satyam-Tech Mahindra.

See Infosys rising closer to Rs 2,900: Manghnani

"When I say 2013 is going to be better, this means that growth opportunities for Indian IT industry is going to be better and that is what I expect," he said.

"That also means that more jobs will be created by the industry. 25 lakh people are currently employed by IT industry and even if you look at 10 per cent growth, then you are looking at 2-2.5 lakh additional people being hired by the industry and that is very good.

Kris said that a clearer picture would emerge after Infosys and other IT firms announce their full fiscal results for 2012-13.

About the broader economic scenario, Kris said, "Reforms that have happened in last few months have improved the sentiments, increased the confidence, and I except the growth to reach 7 per cent or more in 2013.

"This is a right signal to the investment community saying that we continue to emphasise on economic growth and on attractinng investment and continue to focus on making sure that jobs are created with economic growth.

"It's actually a very positive thing and the reaction that I am getting from the foreign investment community and the business leaders here is that they want this to be continued and sustained and I am hoping that we will see more
annoucements and more initiatives from the government and that will help us achieve a seven per cent growth and even more," he said.

S Gopalakrishnan, along with N R Narayana Murthy and five others, founded Infosys in 1981.

He has served as Director (Technical) and his initial responsibilities included the management of design, development, implementation, and support of information systems for clients in the consumer products industry in the
US.

Before becoming the CEO and Managing Director in July 2007, Kris had served as the company's Chief Operating Officer, President and Joint Managing Director, responsible for customer services, technology, investments, and acquisitions. He took over as the Executive Co-Chairman on August 21, 2011.

Infosys on January 11, beat market expectations with its December quarter results and also raised dollar revenue guidance for the fiscal ending March 31, while country's largest software services firm TCS also beat forecasts and said it was very confident heading into the new year.    

Country's third largest software services firm Wipro beat market expectations by posting 18 per cent gain in net profit at Rs 1,716 crore for October-December quarter, and HCL Technologies beat market estimates with 68.4 per cent jump in quarterly profit.    

According to research firm Gartner, spending on IT services will grow 5.2 per cent to USD 927 billion in 2013, compared with growth of 1.8 per cent in 2012.

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Reliance Comm shares fall on Dec quarter earnings

Thu, Jan 24, 2013 at 11:52

Shares in Reliance Communications Ltd are down 3.6 percent in trade on Thursday, after India's No.3 mobile phone carrier by customers reported a second consecutive quarter of profit declines on Wednesday.

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Reliance Comm shares fall on Dec quarter earnings

Shares in Reliance Communications Ltd are down 3.6 percent in trade on Thursday, after India's No.3 mobile phone carrier by customers reported a second consecutive quarter of profit declines on Wednesday.

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Reliance Comm shares fall on Dec quarter earnings

Shares in Reliance Communications Ltd are down 3.6 percent in trade on Thursday, after India's No.3 mobile phone carrier by customers reported a second consecutive quarter of profit declines on Wednesday.

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From DJ EU Officials Spain Aid Cap Of 100 Bn Euros 'should Be Enough'

The latest earning numbers FIRST on CNBC-TV18

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Excitement on cyclical stocks faces reality test

Stock-pickers betting on an Indian economic rebound may be disappointed by upcoming earnings reports from domestically focused companies, as consumer demand and infrastructure output remain weak and high inflation persists.

Banks including Goldman Sachs, Morgan Stanley and Deutsche Bank have issued reports arguing that cyclicals will help Indian indexes hit record highs this year after shares such as Hero MotoCorp Ltd underperformed the index in 2012.

But many fund managers are sceptical.

See 25bps cut in Jan; positive on JLR, pvt banks: JM Fin

Despite a strong start to earnings season, upcoming results for Indian companies geared to the domestic economic cycle such as top carmaker Maruti Suzuki are likely to be uneven.

"I don't share the excitement about the economic growth or the investment situation in the country," said Walter Rossini, a Milan-based fund manager at Gestielle India, which manages USD 200 million of Indian shares.

"There has been no real action (large new investments) so far in sectors like power, energy and roads. I don't see a market-wide trend in earnings," he said, adding he was looking to book profits in shares.

The BSE Sensex has gained 3.1 percent this year after surging 25.7 percent in 2012.

Accumulate Tata Motors; target of Rs 325: Emkay

Optimism is based on expectations that anticipated interest rate cuts will revive an ailing economy, as well as cheap valuations. Cyclical stocks, including Tata Motors, are among the cheapest in the BSE's 30 constituents, according to Thomson Reuters StarMine data.

Tata Motors is trading at 7.2 times forward fiscal 2014 earnings versus around 14 for the broader BSE index.

Sturdy results from software services exporters such as Infosys , dependant on the global economy, have bolstered sentiment.

But Hindustan Unilever , India's largest consumer goods maker, on Tuesday gave an early warning signal of feeble consumer demand, posting disappointing volume growth that sent shares down 7.5 percent over two sessions.

Hindustan's results could also curb the recent strong gains in retailers' shares such as Pantaloon Retail India Ltd after the Indian government last year allowed foreign supermarkets into the country, setting up expectations of stake purchases as early as this year.

CAUTIOUS PICTURE

StarMine SmartEstimate data for the BSE's cyclical components also paint a cautious picture. These calls focus only on the forecasts for top-ranked analysts, comparing them against wider consensus estimates.

By this metric, power gear maker Bharat Heavy Electricals Ltd, exposed to still-sluggish infrastructure spending, is expected to underperform consensus forecasts by 4.8 percent in the fiscal year starting in April, while two-wheeler maker Hero MotoCorp could trail expectations by 3 percent.

Eric Mookherjee, a Paris-based fund manager for Shanti India, which owns about USD 300 million of Indian shares, said Indian stocks are getting ahead of themselves.

"All this bullishness after a few earnings is a little misplaced," he said.

"Even the consumer companies are not very comfortable with the demand environment," he said.

The argument for cyclicals is based in part on expectations that the Reserve Bank of India will start cutting interest rates on January 29 after nine months of holding steady, supporting an economy set for its slowest growth in a decade.

But some analysts warn against over-estimating the impact on corporate profits, as only sustained easing would have a meaningful impact, a premise that is still uncertain.

Although wholesale prices rose last month at their slowest in three years, consumer price inflation accelerated on higher food prices and could pick-up further after India allowed a gradual rise in subsidised diesel prices, which could temper the momentum of further rate cuts.

Expect RBI to ease policy rates by 25-50 bps: JP Morgan

"We are in the early stages of an economic recovery. We are also at a stage where the RBI will begin cutting rates. So there will clearly be growing interest in cyclical stocks," said Saurabh Mukherjea, head of equities at Ambit Capital in Mumbai.

"I don't think the recovery will be so strong that those firms will be able to get out of trouble," he said, referring to the companies whose balance sheets "got destroyed" in the downturn.

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HDIL comfortable with debt repayments: Official

A senior executive at real estate developer Housing Development & Infrastructure Ltd said on Thursday the company was "very comfortable" with its debt repayments, after its shares fell as much as 22 percent.

"There have been lots of rumours in the market about bankruptcy and defaults, which we totally deny," said Hariprakash Pandey, vice-president of finance at HDIL, in a conference call.

"We are very comfortable with the debt repayment schedule and we are as per schedule," he added.

HDIL shares extend slump after exec sells partial stake

HDIL shares were down 15.4 percent as of 12:44 p.m., after dropping 20.4 percent in the previous two sessions.

See HDIL falling closer to Rs 75-80: Baliga

Exit HDIL: Sukhani

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HDIL denies bankruptcy talks, mkt chucks land funding tale

Moneycontrol Bureau

Although the management of Mumbai-based realty developer Housing Development Infrastructure ( HDIL ) refuted claims of bankruptcy, which was born after promoters sold 1 percent stake in open market, the damage done to the stock was too harsh to recover. In a conference call with analysts and fund managers, the company said the promoter had sold the shares to fund the last tranche of payment due on a land parcel the company had bought in 2010-11.

Investors chose to punish the apparent "careless" move of the promoters by butchering the stock;  HDIL shares were down 15 percent to Rs 81.60 after having touched Rs 75 earlier in the day.

The stock has fallen around 33 percent since Tuesday, and fuelling investor concern is the fact that 98 percent of the promoter holding is pledged with financiers. Should the stock price continue to weaken, the promoters will have either deposit more shares as collateral or return a part of the money owed so as to maintain the collateral to loan value at a pre-decided level. Usually for realty companies, lenders loan about 50 percent of the value of the shares pledged.

HDIL has been trying to cut down its debt worth Rs 4,096 crore by 25-30% in the current financial year via FSI sales, TDR sales and project launches. According to experts, the move had made the company cash-starved as it did not receive cash from the FSI sales. To tide over this, Sarang Wadhawan, MD and vice chairman, sold 50 lakh shares for Rs 57 crore in the secondary market early this week.

The mood was also dampened since 98 percent of promoters' holdings are pledged, which analysts say indicate severe cash crunch in the company. However, in a conference call, the management said the company's was able to reduce standalone debt by Rs 200 crore to Rs 3472 crore.

In an attempt to allay fears, the company assured investors that promoters were not looking to sell further shares and would buyback stake from the market after six months, as per SEBI's  norms. The management also mentioned the company's liquidity position was not a concern.

Meanwhile, analysts say that Lodha group coming out with aggressive rates in Mumbai have put pressure on realty players. Last week, Lodha Group had claimed that its residential project Codename Blue Moon at Worli received more than 1000 applications in few hours.

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Idea Cellular increases call prices in some zones

Wed, Jan 23, 2013 at 11:52

Idea Cellular, India's No. 3 mobile phone carrier by revenue and fourth-biggest by customers, has increased voice call prices in some telecommunications zones by withdrawing promotional offers, a company spokeswoman said.

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Idea Cellular increases call prices in some zones

Idea Cellular, India's No. 3 mobile phone carrier by revenue and fourth-biggest by customers, has increased voice call prices in some telecommunications zones by withdrawing promotional offers, a company spokeswoman said.

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Idea Cellular increases call prices in some zones

Idea Cellular, India's No. 3 mobile phone carrier by revenue and fourth-biggest by customers, has increased voice call prices in some telecommunications zones by withdrawing promotional offers, a company spokeswoman said.

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Idea Cellular , India's No. 3 mobile phone carrier by revenue and fourth-biggest by customers, has increased voice call prices in some telecommunications zones by withdrawing promotional offers, a company spokeswoman said.

The Idea spokeswoman gave no further detail but said there was "no across the board" increase in call tariffs.

Bharti Airtel raises voice call prices; shares soar

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Global eco to be stable in 2013; see growth ahead: Wipro

Problems of the US fiscal cliff, uncertainty over the eurozone and policy issues in India have all played spoilsport for the global economy. Azim Premji, Chairman of Wipro expects 2013 to be a year of stabilisation as the US looks a lot better than last year and Europe is firmer than before.
 
Premji further added that their third quarter results could have been better if not for order closures that were carried on to Q4 along with some of the billing. However, he is satisfied with results and going forward, sees revenues anywhere between 0.3 to 3 percent.
 
Languishing at number four amongst the top IT companies, Wipro is trying to set its fundamentals right over the past 18 to 20 months, informed Premji. He also reiterated the fact that despite improvement in fundamentals, there has been a delay in its growth pick up and that is certainly disappointing.
 
Here is the edited transcript of the interview on CNBC-TV18.

Q: Let me start with the global economy, do you expect based on all the conversations you have with your team, with clients that this will be a year of recovery, probably of stabilisation or maybe even further deterioration?

A: I would say it's a year of stabilisation; the US is looking a little better. I know there is a fiscal cliff coming up again in February but, I think it will get resolved. Hopefully, it will not get kicked around too much into the future. We think for our business in IT, US should be better.
 
Europe is more or less stable. It's like a Hindi movie, one week it is good, one week it is not so good. The euro is a little firmer and that is some indication of the strength of the economy. I think it will be stable and we don't expect any catharsis to take place in Europe. Far East is reasonably good. Due to the high oil prices Middle East continues to be good, Australia is good, Latin America is okay and India has seen a spat of reforms taking place over the past two months, all of which are positive. If that momentum keeps up, it is good for the economy.

Q: I want to get into the India reform aspect in little more detail but, before that I will persist with the global questioning, you seem a little more optimistic about the global scenario this year and yet when I look at the guidance that your company has put out, it is a fairly broad range, 0.5 to 3 percent. Why is it then that your guidance speaks of expected volatility and uncertainty whereas you sound a little more optimistic?

A: We like to be conservative in our guidance.

Q: But, 0.3 to 3 percent is a very wide range?

A: We normally give 2 percent. This time we have given 2.5 percent range. It is neither here nor there.

Q: What is the worst case scenario you are building into when it comes to 0.5 percent?

A: Sometimes the billing carries into the New Year and we just have to keep those contingencies in terms of what we communicate. I do not think we should read too much into it in terms of the 2.5 percentage span versus the 2 percent span.

Q: This global picture that you just described, is that what you will deliver, 3 percent is that what will deliver 0.5 percent?

A: I think you should wait for what guidance we give in Q1 of next year.

Q: But does that global picture fit into 0.5 percent and hence we should expect that if the global economy stabilises, as you mentioned, you would probably meet the higher end of the target?

A: I think you should expect that we will have a result between 0.5 percent and 3 percent. Let's not try to be more specific, otherwise we would have given it in our guidance.

Q: What did you make of your numbers this quarter because two of your other competitors, both TCS and Infosys outdid expectations by market analysts and they were more delighted with Infosys and TCS numbers than Wipro?

A: We could have done better. Some of our order closures carried over, some of our billing carried over. It was okay. What was expected from the analysts, we did that. Our standards are higher, so we would be less satisfied with those kinds of numbers than we would have been otherwise.

Q: If there was a carryover, you expect to outdo expectations in Q4?

A: We expect to also have carryovers from the Q4 into the Q1.

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Jaypee Infra share sale on Thursday to cut parent stake

Jaypee Infratech 's parent will sell up to 98.5 million shares on Thursday to raise up to USD 94 million to meet the market regulator's guidelines on minimum public shareholding.

Jaiprakash Associates , which owns about 83 percent of Jaypee Infratech, will sell 27.9 million shares to institutional investors with an option to increase it by another 70.6 million, the company said in a statement late on Tuesday.

Buy IFCI, IB Real Estate, JP Infra: Agarwal

Jaypee Infratech, which builds roads and homes primarily in the north Indian state of Uttar Pradesh, plans to announce the floor price for the share auction after market hours on Wednesday, it said.

The Securities and Exchange Board of India has directed listed companies to ensure that at least 25 percent of their shares are publicly traded by June end.

Jaypee Infratech shares were down around 4 percent at Rs 51 at midday.

JP Morgan is the banker to the deal.

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Hope to reduce debt of Rs 2,750 crore soon: Hotel Leela

Forex loans raised by infrastructure and manufacturing companies can be used to retire rupee loans. Now, hotel companies too could do the same. This facility of replacing expensive rupee loans with cheap foreign exchange loans was extended to hotel companies as well.

Vivek Nair, vice chairman & MD, Hotel Leela , says that the company has plans to reduce debt by Rs 2,750 crore in near future and transaction of Leela Business Park in Chennai will be completed soon.

Also read: Improving dynamics in India, China attracting flows: HSBC

Below is the edited transcript of his interview to CNBC-TV18.

Q: Will you use the facility of replacing expensive rupee loan with forex loans that is now available?

A: Yes, we have been clamoring for this for last several years. We have been asking RBI to include infrastructure lending in the list. It was to a certain degree passed in the March 1 meeting of the Cabinet Committee on Infrastructure but only hotels in the rural areas outside city limits of 10 lakh are benefitted. So they are still working on that to extend it throughout the country because right now only 95 percent of the hotel projects are in infrastructure.

The benefit of being under infrastructure lending list is that one could replace existing rupee debt by ECBs.  

Hotels earn foreign exchange between 20-50 percent depending on the location because the food and beverages and other banquet income is normally in rupees. So we put forth that argument and even though the infrastructure lending list has not been extended throughout the country, thanks to the initiative that we have taken through our federation, the government has agreed to have the rupee debt replaced by foreign currency loans, which are at the lower level because we have a natural hedge. We earn dollars and therefore we can repay in dollars.

Q: How will you react to it for Hotel Leela itself? You have Rs 3,000 crore debt, immediately what are the plans?

A: They put a qualifier that we can only avail ECBs to the extent of 50 percent of the last three years earnings, which is disappointing. All along we told them that do not apply to us because only 15-20 percent of the total debt exposure on books of an average hotel company whether it is Leela or any other would be covered under this and that does not make it meaningful. We are in talks with them to enhance the limit because the current ceiling only affects 20 percent and 80 percent continues in rupee debt.

Same applies to our company too, only 20 percent of our debt would be eligible under this present qualifier. However, I am sure we can convince them to make it meaningful to increase the criterion. So in our case, it will be around Rs 400-500 crore. I am sure we can convince the ministry of finance and RBI to change the criteria to make it more meaningful.

watch for more...

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IndiGo to launch daily flights to Dubai from March

Budget carrier IndiGo will launch daily flights on the Thiruvananthapuram-Dubai route from March 1 this year.

The airline would be offering introductory all-inclusive return fare of Rs 11,998 on the new non-stop flight, IndiGo President Aditya Ghosh said in a release.

IndiGo plans to fly Singapore from Hyderabad, Bengaluru

"We are introducing the flight considering the strong trade and tourism ties between the southern region of India and Dubai and the requirement of travellers for a low-fare Indian airline in the sector," he said.

A second daily and non-stop flight between Mumbai and Dubai is also being launched.

IndiGo is positioned as the fastest growing airline in India with 61 brand new Airbus A 320-Es and is operating 377 daily flights connecting 33 destinations, he said. The Thiruvananthapuram-Dubai flight would leave at 1820 hrs and reach Dubai at 2115 hrs. In the return trip, it would leave Dubai at 1125 hrs and reach here at 1715 hrs, the release added.

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Expect to invest over Rs 20,000cr in equities in Q4: LIC

Over the last few months, there have been reports of domestic institutional selling in the market. However, S Sarkar, Managing Director of LIC said they have been net buyers in the equity market in 2012 and they are not selling into the rally. He also told CNBC-TV18 that though, LIC is keen to participate in all divestment issuances at decent valuations, they are not selling at the moment with an aim to raise fund for participating in divestments.

Also read: Rangebound market: Morgan Stanley MF says bet on equities

"LIC has a stated intention of participating in any good issue, whether it is from the government or from the private sector. The second point is that most of the government companies which are lined up are all fundamentally very sound and makes a good case for investment," he explained.

Sarkar also added that the public sector divestments lined up for the near-term are fundamentally sound. In the last two years, its equity investments have touched Rs 45,000 crore, he informed. Besides, they need not exhaust the 30 percent investment limit in public sector companies, said Sarkar.

As far as LIC's decision to invest in PSUs are concerned, it will depend on growth prospects and investments in secondary market will be dependent on issuances, he explained. Going forward, LIC expects to invest over Rs 20,000 crore in the equity market in Q4.

Here is the edited transcript of the interview on CNBC-TV18.

Q: We have been reading a lot of reports about domestic institutional selling continuously over the last many months. Has LIC been a net seller over the last three months in equities and if yes, to what kind of amount would you say?

A: LIC is a long-term and systematic investor. That way, I can even generalize by saying that all the life insurance companies who are in the traditional life insurance business are all systematic investors. So we invest in all phases of the market and on your question of whether we have been net sellers, I don't think we have been net sellers, we have only been net buyers during the year.

Q: I asked because there is a perception that you have been actually raising some cash to be able to subscribe to some of the PSU paper which will come through in terms of divestments from the government to create some headroom for those kind of investments. Is that true that you have been creating some kind of a chest for PSU purchases?

A: These type of rumours are cyclical, they keep on happening and as you know that in an insurance business, funds flow in regularly. One does not have to create any chest for a specific investment and it is not the first time that we are making investments and participating in PSU disinvestment. I don't think that is correct at all.

Q: Could you update us on what the net buy figure was for LIC, either for the quarter ended December or the most recent data that you would have?

A: I don't have the net buy figure but, till about December end we have invested about Rs 21,000 crore on a gross basis in the market.

Q: Between now and the end of this financial year, there will be quite a few government issuances whether it is Oil India or National Thermal Power Corporation (NTPC). Does LIC have a stated intention of participating and increasing stake in the companies?

A: The first point is LIC has a stated intention of participating in any good issue, whether it is from the government or from the private sector. The second point is that most of the government companies which are lined up are all fundamentally very sound. Most of them are cash rich companies and if the pricing is good and depending on the method of selling it undertakes, it is a very good case for investment.

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Promoters' stake reduces to 38.40% in Deccan Chronicle

Hyderabad-based publisher of English daily Deccan Chronicle Holdings (DCHL) has been under severe selling pressure, down 22 percent in the last five trading sessions. Today the shares were locked at 5 percent lower circuit.

Deccan posted a loss of Rs 100 crore for the quarter ended September 30, 2012 against a profit Rs 21.09 crore during the corresponding quarter last year. The promoters' stake in the company has been reduced to 38.40 percent from 73.83 percent, as on September 30, 2012.

"Promoters of the company have offered their shares as collateral security to some of the lenders for their financial assistance provided to the company and some of them have invoked the pledge and appropriated the same against the dues payable to them. Promoters have contested the invocation and appropriation of the pledge by the lenders," the company said in a press release.

Total income from operations fell drastically to Rs 149.16 crore in the July-September quarter from Rs 238.24 crore in corresponding quarter of previous fiscal. During the same period, finance cost jumped 4.66 times year-on-year to Rs 81.23 crore.

Shares crashed 90 percent in last one year as the company has been facing financial crisis. The stock was quoting at Rs 5.57 at 12:39 hours IST.
 
There were pending sell orders of 836,551 shares, with no buyers available. Market capitalisation of the company currently stands at Rs 116.40 crore.

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Kotak Mah Bank rises over 2% post stellar Q3 earnings

Shares of Kotak Mahindra Bank gained more than 2 percent amid heavy volumes on Tuesday after reporting better-than-expected results in third quarter of financial year 2012-13.

Standalone net profit grew by 31.16 percent year-on-year, higher than analysts' expectations, to Rs 362 crore in the quarter, helped by fall in provisions.

Net interest income jumped 26.42% to Rs 823 crore from Rs 651 crore during the same period, which too came in above forecast.

Analysts on an average were expecting net profit at Rs 306.7 crore and net interest income at Rs 779 crore for the quarter.

Gross non-performing asset (NPA) fell by 15 basis points quarter-on-quarter to 1.46 percent and net NPA declined 11 basis points to 0.62 percent in the October-December quarter.

Provisions against bad loans were Rs 42 crore, down by 41 percent compared to Rs 71 crore in previous quarter. Provision coverage ratio stood at 66.6 percent as on December 31.

At 13:31 hours IST, the stock went up 2.23 percent to Rs 643.05 on Bombay Stock Exchange.

Trading volumes increased quite significantly to 6,61,262 equity shares as compared to five day average of 90,022 shares.

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Hindustan Unilever slips below 200 DMA

Shares in Hindustan Unilever fall 0.8 percent, dipping below its 200-day moving average for the first time since May 5, 2011.

Falls in Hindustan Unilever come ahead of October-December results due on Tuesday. India's largest consumer goods maker is expected to post a 16 percent rise in third quarter net profit to Rs 880 crore, according to StarMine analyst estimates.

Analysts say comments on volume growth and royalty payments to Unilever Plc would be key.

Hindustan Unilever shares have fallen 11.2 percent since October 26 as of Friday's close, after volume growth disappointed in the July-September quarter as well as on royalty payment concerns.

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Jaguar Land Rover launches locally built XF for Rs 44.5lakh

Moneycontrol Bureau

Tata Motors owned British luxury car maker Jaguar Land Rover has launched the new XF saloon in India built at its Pune plant.

The company is starting production of the Jaguar XF, which will feature a 2.2 litre diesel engine, and will have an entry price of Rs 44.5 lakh, it said on Monday.

The Jaguar will be built alongside the Land Rover Freelander 2 sports utility vehicle, which is being produced in Pune since May 2011.

"Our best-selling models in India are the Land Rover Freelander 2 and the Jaguar XF and this has driven the move to build these products locally," said Rohit Suri, VP, Jaguar Land Rover India.

The locally built Jaguar XF will come equipped with a host of standard features, including rear view camera, TV tuner, navigation system, rear screen electric blind and eight-speed automatic transmission, the company added.

JLR last week reported that its wholesales in India rose 32 percent year-on-year to 2,393 units.

Tata Motors shares were down 1.4 percent at Rs 323.85 on NSE in afternoon trade.

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Citibank brings in paperless payment system for cardholders

Citibank India today announced a new paperless mobile payment system for its credit and debit card customers that would do away with the charge slips and would be implemented for the entire global network of its US-based
parent Citigroup.

The development makes Citibank India the first country franchise within Citigroup to launch an industry innovative mobile payment solution, which has been developed with its technology partner Ezetap.
    
Citibank said in a statement it has already partnered with seven leading brands for the launch of this service in India, where it would help its more than 320 million card customers to make payments through their debit and credit cards at the point of payment.
    
The new payment solution would help customers purchase a wide range of goods and services, pay insurance premiums, mobile phone bills, recharge mobile phones or buy movie, theatre and event tickets at the convenience of their home or office with their cards.

Expect lesser restructuring & provisioning in Q4: IDBI Bank
    
It would also allow customers to make card payments at the point of purchase itself at the retail outlets, thereby avoiding long queues at payment counters in these stores.
    
"The secured paperless transaction not only does away with managing charge slips but also combines the many benefits enjoyed by Citibank card customers, including instant redemption of reward points, ability to opt for EMI payment option while using this new payment alternative," said Anand
Selvakesari, Country Business Manager, Global Consumer Group, Citibank India.
    
Flipkart, Shoppers Stop, Bajaj Allianz and Bookmyshow are among the brands that are at various stages of testing and implementation of this payment solution.

Government pushes banks to go rural, but will it pay?
   
"The industry first fully certified and secured mobile payment solution from Citibank, seeks to change the way payments are made for products and services of daily use in India, just as the first ATM pioneered by Citi in 1977
revolutionised the concept of cash withdrawal worldwide," Selvakesari said.
    
The new system can work through a dongle, which can be plugged into smart phones and tablets and is compliant with the global security standards developed by the Payment Card Industry Security Standards Council.
   
Citibank said that the payment process is compliant with Citigroup global security standards and has also been approved by regulators in India.
    
"We believe that this payment and collection device has the potential to dramatically increase the penetration of card terminals," said Muge Yuzuak, Country Head Cards and Personal Loans, Citibank India.
    
Card terminals in India currently stand at around 700,000 with China estimated at around 5 million, Selvakesari said adding that India has the potential to be anywhere between 10 and 20 million acceptance points across industries over the next few years.

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BHEL commissions STG unit at Ethiopia plant

State-run BHEL today said it has commissioned steam turbine and generator (STG) unit at a power plant in Ethiopia.

"BHEL has commissioned first Steam Turbine Generator Unit in Ethiopia, the company's first ever in Africa," a company statement said.

The steam turbine generator set of 12 MW capacity has been commissioned at the Finchaa Sugar Factory for the plant's own use, it said.

The company did not disclose the financial details of the project.

BHEL renovates, commissions hydro power plant in Tajikistan

It added that the plant will supply process steam and power to the sugar factory and the excess power will be supplied to the Ethiopian Electricity Power Company.

BHEL will supply Steam Turbine Generator units from its Hyderabad Plant and has control system from its Bangalore works. The civil works, erection and commissioning of the plant has also been executed by BHEL, it said.

BHEL, which supplies products and systems for thermal, gas and hydro power plants has presence across 75 countries.
    
The company currently manufactures equipment to support 20,000 MW of power generation capacity.

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Airports Authority of India pays Rs 171.90 cr dividend

Mini-ratna public sector undertaking (PSU) Airports Authority of India today paid a dividend of Rs 171.90 crore to Civil Aviation Minister Ajit Singh, who received it on behalf of the government. During the last fiscal (2011-12), AAI had paid a dividend of Rs 169.30 crore and earned a revenue of Rs 5,879 crore against Rs 5,139 crore in 2010-11, AAI said in a statement.

Also Read: Kingfisher Air down 4% after losing slots at Mumbai Airport

The state-owned airport operator has earned profit before tax of Rs 1,364 crore against previous year's Rs 1,346 crore. The dividend paid by the AAI to the government has gone up from Rs 169.40 crore in 2010-11 to Rs 171.90 crore in 2011-12, the statement said.

The AAI has spent Rs 2,095 crore on modernising airport terminals, passenger facilities and air traffic and navigational aids in the FY 2011-12 against Rs 2,503 crore in 2010-11. AAI Chairman V P Agarwal presented the cheque of Rs 171.90 crore to the Civil Aviation Minister.

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Ex-CEO Apple, co-ordination key tech challenges: Sculley

Welcome to this edition of CNBC-TV18's The Forbes India Show. Our guest today has a corporate career that is enviable. After leading Pepsi for several years, he decided to join Steve Jobs and change the world. Since then he has decided to turn entrepreneur and mentor other young entrepreneurs- Meet John Sculley.

Below is an edited transcript of the show on CNBC-TV18

Q: What has life been like over the last few years? You have decided to play mentor. What is life like for you?

A: I left Apple 20 years ago in 1993. This is 2013 and I have actually been doing this with my brothers for all the time since I left Apple. We have helped to build quite a large number of very successful companies mostly in North America, some in Europe. We started the first Credit Default Swap (CDS) exchange in London which we sold to ICE Clear Credit. We have built a number of BEC companies in the US, but my role now is not running companies, but is mentoring the next generation of entrepreneurs.

Q: The gap between technology and product differentiation is narrowing significantly and this trend is playing out in Apple and Samsung currently. Will the technology business now have to cope with the metrics that govern the FMCG sector? Are we now living in the world of fast moving consumer durables and not just fast moving consumer goods?

A: I think you are absolutely right. I think what observers have missed, especially in companies like Apple and Apple, is that when companies of such scale go from a once-a-year-product-refresh cycle to a twice-a-year-product-refresh cycle, the shift has a significant impact on the entire industry.

Apple now is dealing with the fact that while smart phones are pretty well-developed in western markets, in India the smart-phones penetration is about 4 percent as compared to over-50 percent in North America. So the foray into developing markets entails different price points. So companies like Apple and Samsung have to seriously contemplate and formulate strategies to adapt to a world where technology is commoditising so rapidly that what is sold for USD 500 today may well be sold for USD 100 by a competitor.

Q: Do you think Apple has failed at adapting as quickly as required?

A: I think any CEO who is leading an innovative company has to be thinking about how to rapidly adapt. Big organisations have a tough time adapting rapidly. I think that Apple's biggest challenge is dealing at the scale at which the post PC-era devices are evolving, because it just isn't a device, it all the end-to-end systems of cloud, app stores and iTunes stores and things of this sort, that have to be coordinated.

 So it is very complex and Apple is lucky to have Tim Cook leading it because there is probably no one in the world who has more experience and success running in supply chain than Tim Cook does. The tricky thing for a product company is that it should be led by product leadership. At Apple, I think they made a really important decision by choosing Jonathan Ive as product leader.

 Jony has tremendous reputation and I think Apple is in a very good stead. While he is not the CEO, as the product leader he clearly has been given the credentials by the board and by the CEO to be able to make the product call. So, I think Apple is in much better position in terms of being able to deal with the future than people are giving it credit for.

Q: It is well-known that Apple is Steve Jobs and Steve Jobs is Apple. But how does a company grow and evolve out of such as powerful legacy?

A: I do not think you necessarily want to grow out of that legacy. I think one of the most important things that Steve left was creating the Apple University and bringing in top educators to make sure that the next generation of Apple employees would understand the cultural values of Apple.

He was more interested in the survival of the institution including the culture, as he was about the sustainability of the individual products. The thing that probably will not happen again at Apple is that an iPhone is a once-in-a- lifetime event.

Q: The trend of creating new categories which Apple has done phenomenally well happens once every decade or 15 years. Where do we go from here?

A: Steve was brilliant at creating categories. He did it whenever it was possible. But after he left Apple, he created NeXT and it was not a success. It wasn't his fault. There  are moments when technology is not ready to take you to the next level. He couldn't have built an iPhone five years earlier because the technology wasn't ready.

So it didn't make any difference how good Steve's vision might have been five years earlier because it wouldn't have happened till the time it did happen. May be Apple will reinvent television but television is a very small market compared to smart-phones. So I don't know whether Apple will have that big opportunity to reinvent an entire industry as before. So now Apple has to cope in a world of making adjustments and Samsung has got it going pretty good.

Q: What's your own take on the patent war that is on between Apple and Samsung?

A: I would not even want to venture a guess on where that turns out. I am much more focused on the fact that Samsung's hardware is pretty outstanding and Samsung doesn't have the depth of software. They are totally dependent on Android right now, but they have just opened up four campuses in Silicon Valley, so they have the resources. Both Apple and Samsung are rapidly integrating vertically.

So as the industry commoditises and as price points go down, they will still make money. The real question is will it be anything more than a two-horse race? It is not an all-clear, that there be a strong number three. May be there will be but right now it is just the two-horse race between Samsung and Apple.

Q: I want to talk to you about India. The widespread opinion in India is that it has been ignored by Apple while China forms a huge part of Apple's global strategy. Why is that and do you share that opinion?

A: I don't think Apple has ignored India. I think it is pretty obvious that it didn't make much sense for Apple to launch its lead products- the iPhone and iPad- in a country that only had 2G. Well, now you have 3G and Apple is going to have an important presence here.

Q: But for R&D and manufacturing, China held centrestage for Apple while for the rest of the world the focus is on India?

A: I can't comment or add any insight. But I think Apple had said that China will be its most important market in the world and that makes sense. I think India is about where China was in 2005. But there isn't any question in my mind that India is going to be outrageously successful with online services.

Mobile broadband has passed desktop Web, e-commerce is just starting to take off and half of the people who are using e-commerce now are under 25 years age. I co-founded a company in India called Change My Tyre. The first era of globalization was about exports. The second era of globalisation is about a developing market model middleclass and domestic markets.

So the opportunity to bring the kind of new middleclass-services - cars, two-wheelers, condos, electronics and furniture in the condos at different price points than in the West. So I am very interested in investing in developing markets, particularly India and the ASEAN countries, on exactly that thesis.

Q: The Internet is going to be the preferred choice for you in India when you are talking about investments?

A: Absolutely. We are actually buying companies now. My firm is called InflexionPoint has announced the acquisition of a company called Iris in Delhi and that deal will be closed in the next few months. We have also announced the acquisition of another company in Singapore called Dragon which will be concluded in the same period.

Q: Do you have any concerns about the regulatory environment in India because specifically when it comes to e-commerce, foreign direct investment is actually not been allowed yet and there are no plans to open it up? Is that a concern for you?

A: You have to structure differently. I have always maintained that one has to know the rules and adapt to them. So there are some things that can be done here and others we can't. So we set up a buying hub in Singapore.

We do our credit financing in different ways with much of it being offshore because we are not allowed to do certain things onshore in India. But we want to work closely with banking systems and business partners in India. So we have to adapt to fit in and we are comfortable doing that.

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GMDC gets MoEF nod for Umarsar lignite mines in Kutch

State PSU Gujarat Mineral Development Corporation (GMDC) today said it has got all environmental clearances for its Umarsar mines in Kutch, having an estimated lignite reserves of 21 million tonne (MT). "All environmental clearances have been granted by the Ministry of Environment and Forest (MoEF) for our Umarsar mines in Kutch, which is around 10 kms away from Panandhro group of mines," an official statement said.

The mines have estimated lignite reserves of 21 MT, and since long an environmental clearance was awaited for it, it said. The company now plans to start mining activity there soon. "The Umarsar mines spread across 5,402 acres and have estimated production capacity of 1 MT per annum. The mining there will create new job opportunities for locals as well as benefit lignite run power plants in the state," the statement said.

GMDC has plans to commence mining at Lakhpat Dhedadi lignite and limestone mines, in Kutch having an estimated reserve of 50 MT. It also plans to start mining activity at Damlai Padal lignite mines in Bharuch with an estimated reserves of 19 MT, and has applied for mining lease in Ghala near Surat.

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Young-turk trio harness IT trends to boost customer bond

In this episode of CNBC-TV18's Young Turks, meet IITians Anish Reddy, Krishna Mehra and Ajay Modani who left their comfortable corporate careers behind and found Capillary Technologies in 2008 betting on cloud computing. Capillary helps retailers intelligently engage with customers through mobile, social networking and in-store channels.

This Bangalore-based venture has recently raised Rs 85 crore from Sequoia Capital, Norwest Venture Partners and existing investors Qualcomm Ventures. Join us as we find out what Capillary's next milestone is likely to be.

Also Read: IndiBlogger.in set to expand international influence

Below is an edited transcript of the show on CNBC-TV18.

Armed with a Rs 15-lakh loan from their alma mater's entrepreneurial cell, the three IITians went about building a customer engagement platform that it did not require customers to fill up forms or carry a membership card. And that's what gave birth to Capillary and its flagship product, InTouch- a cloud-based retail customer relationship management solutions that retailers can use to access and use customer and purchase data to entice buyers with loyalty programmes, discounts or rewards. InTouch also provides add-on products like call-centre support, gift cards and a complaint-management system. The team claims their marquee clients like Pizza Hut, Puma, Raymond and United Colors of Benetton (UCB) have realised as much as a 10-percent increase in same-store sales by leveraging Capillary's solution. Krishna Mehra tells us how it all began.

Krishna Mehra, co-founder, Capillary: For a retailer, the strongest bond is the one that exists with the customer. So we realised that this area offered potential for disruptive innovation with the help of new technologies. Most retailers issued out plastic cards as part of their customer-loyalty programmes. However, most customers never carried those cards and that put paid to customer-loyalty programmes.

So we figured that there was a big scope of using the mobile-phone as a de facto identifier, validator and communicator to help retailers engage with their customers in a much better manner through the use of real time technologies. And that was the genesis of the business that we have built. I think our key insight was to change the way customers interacted with brands.

And this insight has helped Capillary grab investor-attention from the get-go. In 2009, the venture received Rs 50 lakh from Qualcomm Ventures. Angel investors like Google India head Rajan Anandan continue to pour in capital. And then in September 2012, the boys hit the jackpot.

Capillary raised Rs 85 crore from in series-A funds from Sequoia Capital and Norwest Venture Partners. Like other SaaS model, the startup charges a monthly fee between Rs 5,000 and Rs 25,000 pre store per month and the venture has reached 50 million customers across 10,000 stores and has touched Rs 10 crore in revenue. Krishna says this is just the tip of the iceberg.

Mehra: Capillary harnesses the four most powerful trends in business today- cloud computing, social networking, big data and mobile access- to help a retailer take business to the next level. And we are winning deals against the biggies in this space- against SAP, Epicor, Oracle and dunnhumby. The potential is immense with the large number of retailers in India and overseas who need solutions like this over the next three-to-four to help understand their businesses. We have set our eyes on 50,000 stores and USD 1-billion in revenues in the next four years..

With the pitch set, the Capillary team is gearing up for a long innings. With an eye on backing to non-retail markets like hospitality and healthcare to grow, the trio is targeting partners in 100 Indian cities by 2015. They are also hoping to offer services in global markets like Southeast Asia, the Middle East and the UK and may look at acquisitions as the preferred route. In fact the company is in a process of acquiring SocialStock, a US-based TechCrunch Disrupt company that will provide a leg-up into the world of social networking.

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Sebi yet to receive all papers in Sahara case: Sinha

Market regulator Sebi today said it is yet to receive "all papers" in the high profile Sahara case where the Supreme Court has directed two group companies to refund money to bond holders. Sebi Chairman U K Sinha said it is fully competent to verify the documents related to the case, with regard to checking the genuineness of the bond holders of two Sahara Group companies.

Also oread: Eager to work with reliable agency in Sahara case: Sebi

"Sebi is fully competent to verify. It has got its agencies in place and it will do its task on time, provided all the information papers are given to us. (But) all papers have not been given to us," Sinha told PTI here. He was responding to a query on whether any verification agency has come forward to ascertain the genuineness of bond-holders.

Sebi held its board meeting here today. The Supreme Court has asked the market regulator to facilitate the refund, amounting to thousands of crores of rupees, after ascertaining the genuineness of about three crore investors from whom the companies had raised money through bonds.

Earlier this week, Sebi had said it has put on hold the process for roping in an 'in-person' verification agency that was to help it ascertain genuineness of bondholders in the Sahara case.
    
The Securities and Exchange Board of India (Sebi) had begun the process in November for selecting an IPV (In-Person Verification) Agency to help it ascertain the credentials of bondholders of two Sahara group companies. The Supreme Court, in its order on August 31, had asked Sebi to ascertain the genuineness of an estimated three crore bondholders of OFCDs (Optionally Fully Convertible Debentures) of two Sahara group companies (Sahara Housing Investment Corporation Ltd and Sahara Real Estate Corporation Ltd) and thereafter facilitate refund of the money with the interest.

Subsequently, the market regulator had decided to carry out in-person verification of these bondholders. Later, the apex court passed another order, wherein Sahara group was allowed to refund the money in three instalments till first week of February.

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Airports Authority of India pays Rs 171.90 cr dividend

Mini-ratna public sector undertaking (PSU) Airports Authority of India today paid a dividend of Rs 171.90 crore to Civil Aviation Minister Ajit Singh, who received it on behalf of the government. During the last fiscal (2011-12), AAI had paid a dividend of Rs 169.30 crore and earned a revenue of Rs 5,879 crore against Rs 5,139 crore in 2010-11, AAI said in a statement.

Also Read: Kingfisher Air down 4% after losing slots at Mumbai Airport

The state-owned airport operator has earned profit before tax of Rs 1,364 crore against previous year's Rs 1,346 crore. The dividend paid by the AAI to the government has gone up from Rs 169.40 crore in 2010-11 to Rs 171.90 crore in 2011-12, the statement said.

The AAI has spent Rs 2,095 crore on modernising airport terminals, passenger facilities and air traffic and navigational aids in the FY 2011-12 against Rs 2,503 crore in 2010-11. AAI Chairman V P Agarwal presented the cheque of Rs 171.90 crore to the Civil Aviation Minister.

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